How London will targets tourists as it plans to convert 20pc of obsolete office stock to hotels
Riya Makwana
5 min read
The City of London has committed to spending £2.5m annually to liven up the Square Mile and attract tourists - Jason Hawkes/Getty Images Europe
The vault in the basement of 27 Poultry used to house the valuables of Midlands bank customers. Today, the 20-tonne safe door leads to a members-only cocktail bar for visitors of The Ned.
The transformation of this historic building to a five-star hotel has provided a blueprint of how to reinvent the Square Mile in the post-pandemic era.
The City of London Corporation, which governs the district, wants to transform swathes of empty offices into hotels as part of plans to turn the financial district into a “global leisure destination” that can draw holidaymakers and pleasure seekers alongside suited bankers.
As much as 20pc of old office blocks could be turned into hotels, officials believe.
“The City’s hotel stock will play a major role in realising the ‘Destination City’ vision,” says Shravan Joshi, chairman at the City of London Corporation Planning and Transport Committee.
The Destination City plan was drawn up by the City of London in 2022 as the Square Mile was reeling from the impact of pandemic lockdowns.
With workers stuck at home, the area’s economy went into freefall and there were doubts over whether offices would ever fill up again. Realising the area had to change, the City of London committed to spending £2.5m annually on livening up the area and attracting tourists.
Transformation of a Midlands bank vault into a cocktail bar for visitors of The Ned is encouraging others to follow suit - Simon Brown/Simon Brown Photography
Examples of spending include an event dubbed The Golden Key last October that featured music, theatre performers and circus acts across 17 locations in the City, including the Old Bailey, Mansion House and Guildhall.
“Major events and new and exciting seasonal arts and culture activity will enliven the City’s streets and venues,” Joshi says.
City officials don’t just want people to commute in for arts and entertainment: they want them to stay too.
“As we work to transform the Square Mile into a seven-day-a-week leisure destination, hotels will help to accommodate all sorts of visitors that are projected to rise substantially,” Joshi says.
The number of hotels in the area has almost doubled between 2013 and 2022 from 24 in to 42, according to Avison Young.
New completions include Canopy by Hilton, a four-star hotel in Minories, and the four-star Westin London City hotel located near St Paul’s Cathedral.
The success of The Ned on Poultry, just a stone’s throw from the Bank of England, shows why more operators are piling in.
Opened in 2017 by the Soho House Group, the property is packed most nights. It hosts 10 restaurants and 17 bars, as well as 250 hotel rooms, a gym and a spa.
Joshi says: “Population and job growth is forecasted to grow significantly in the coming years and the London Plan estimates that an additional 58,000 bedrooms of serviced accommodation will be needed across the capital between 2017 and 2041.”
The push to attract new visitors to the City comes as public transport journeys in the area remain 25pc below pre-pandemic levels, according to data by the Greater London Authority.
While the worst fears about empty offices have not been realised, attendance has flatlined at about three days a week, according to McKinsey. Opening a slew of new hotels also gives the City an elegant solution to another problem: what to do with old offices nobody wants.
Not only is the office sector struggling as companies downsize post-pandemic, but landlords are facing huge extra costs to bring buildings up to net zero standards.
New laws introduced earlier this year prevent landlords from renting out offices with an energy efficiency rating of E or below. The floor will ratchet to a rating of C by 2027 and B in 2030.
Many landlords now face the unappealing prospect of spending large sums to upgrade buildings just as rents and demand are falling.
The City of London Corporation thinks as much as 20pc of these old offices could be transformed into hotels, giving them a new lease of life while also bringing them up to environmental standards.
James Walker, head of London office leasing at Avison Young, said: “What is clear from a sustainability and policy perspective is that reuse is preferable over demolition wherever possible.
“Older buildings with compromised structural issues (e.g. low floor to ceiling heights), which are unable to meet modern standards, would be the first to be considered for change of use.”
The City of London is considering introducing a “retrofit fast track” that will let projects renovating existing buildings jump to the front of the planning permission queue. This could help incentivise more developers to transform the area’s historic buildings into hotels.
Joshi says: “We’re accommodating a retrofit-first approach in our City Plan, which will form the strategic basis for how the City develops over the years ahead.”
Yet amid the rush to bring in new businesses and visitors, the City will not forget office workers.
While Bank Tube station is no longer as busy as it was pre-pandemic, commuters are still core to the Square Mile. HSBC recently announced it was shifting its headquarters from Canary Wharf to the City in a sign of continued corporate interest.
“In addition to leisure visitors, the needs of business visitors require consideration, including provision of suitable facilities for meetings, conferences and exhibitions,” Joshi emphasises.
The City of the future will see pleasure seekers rubbing shoulders with stockbrokers, it seems – at least if the example of 27 Poultry is anything to go by.
